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The Oldest American Idea About Capitalism

Benjamin Franklin built it. We talked ourselves out of it. In the country’s 250th year, we are quietly digging it back up.

Near the end of his life, Benjamin Franklin did something unusual for a founding father. He set up a loan fund. Franklin spent his early years in his brother’s print shop, working for someone else’s profit. He knew the difference between earning a wage and owning the thing that pays it, including that the gap is rarely about talent. It is about capital. A worker without a loan sells his labor and gets by. Give that same worker enough to buy tools or a stake in a business, and you change his family’s path for generations. Franklin knew this firsthand: a loan from two friends had enabled him to start the printing business that allowed him to make his fortune. 

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On June 23, 1789, less than a year before his death, Franklin signed a codicil to his will. In it were provisions for revolving funds in Boston and Philadelphia, loans to young tradespeople at five percent annual interest, with every repayment financing the next borrower. The funds were disbursed for two centuries as Franklin stipulated. By the time it closed in 1990, hundreds of workers had become small business owners and the two cities had banked millions for public use.

Franklin had no name for what he was doing. We do. It is called impact investing, and Franklin was practicing it when the United........

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